“I can purchase that now and pay for it later? ”- (The rising effects of credit cards causing more and more student debt) The cycle always seem to begin when you are least expecting it, I know that’s how it started for me. I was browsing in my favorite store H&M not planning on buying anything when I came across a pair of pants plus shoes that were on sale for 25% off, I could not leave the store without purchasing these items.
Once I made my way to the cash register the cashier started to compliment me on my choices and went on to let me know before I paid if I would apply for their star rewards card I would instantly get an additional 15% off the 25% that was already given even if I wasn’t approved for the card.
I thought that I should just go ahead and do it because even though I didn’t have a job and I was a full-time college student if I were approved for the card I would just have to budget the money I did get to be able to fulfill my responsibilities plus even if I wasn’t approved for the credit line I would still receive the additional 10% off my entire purchase, this was ultimately a win/win situation for me.
Once I made my mind up to apply for the card it only took a matter seconds before the cashier congratulated me on my approval of the $500 credit line I had just received. I know I had originally came into the store just to browse but once I had the concept in my head that “I could purchase these things now and pay the balance off later” there something in my head that told me it was okay to spend more, and I will worry about the bill later. This is the mindset that most students such as myself take on with credit cards and it ultimately cripples there future stability.
When asking who is to blame in this situation , most will argue to say that the students themselves are at fault for making the decision to take on the extra debt, being as though they are at the legal age to make decisions for themselves with all repercussions that come with the decisions they make. I oppose that view; my blame goes directly on the credit card companies. Credit card Companies are very much so profitable, in fact according to Credit. com blog; “The credit card industry experienced a sizeable increase in net pre-tax profits in 2010, rising to 18. 5 billion, up from the previous year’s $13. billion. ” Students play a critical role with these rising profits, not only because credit card companies can make sizable profit off of them but because they view students as a lifetime profit, because once they begin the habit of abusing cards young it usually last for the rest of their life.
First off , Credit Card companies use indirect marketing techniques to hook students, or in better words to draw them in. I can remember my first week of my sophomore year walking into the student center and seeing a credit card poster with a T-shirt on it that said “I will never sign up for 8am’s again. Finding the humor within the T-shirt I decided to go over to the salesman to ask him how can I get that shirt and he went on to tell me that all I had to do was sign up for their “student” visa card that would allow me to purchase food while I’m on campus while I could also earn points for using the card at local gas stations, and not to mention I will be preparing my credit for when I graduated from college. I was weary at first because I already had a credit card that I was struggling to keep up with, but I told myself that it would be okay if I only used this card in case of emergencies.
Now that scenario of myself just shows you how the marketing strategy of a simple message on a T-shirt attracts your attention from its humor and eventually gets you to sign up for a commitment that you weren’t even planning to make at that moment. Credit Card companies recognize how to target students and they make every effort possible to do so. I strongly believe that Credit Card companies do exploit college student’s lack of financial savvy and also security.
Majority of college students as well as myself do not come into college wealthy or even with a job, majority of us enter higher education with limited means. So with that being said, why do Credit Card companies target poor college students such as myself? According to Carlos Macias, the author of “The Credit Card Company Made Me Do It,” the answer is “profits of course. ” Macias goes on to state that “ If they made credit cards less available t struggling consumers such as college students, consumers would have a more difficult time racking up on huge balances, lain and simple. ” Most students that enter college are there for one purpose and that is to get a degree, and leave out ready to start their career. I most students including myself do not plan on leaving with huge amounts of debt and even bad credit. Credit Card companies need to realize that student’s futures are at stake along with their financial reputation. Visa has a slogan “It’s everywhere you want to be,” and if more and more students fall for that the only place we will be is in debt.